Editorial: Why a Takeover of Birmingham City Isn’t Likely Right Now

The report from James Nursey of the Mirror has no quotes, direct or indirect from a man known to many as “Bankrupt Baz”. It didn’t really have any detail about any potential takeover; but as always when things are quiet, it got Birmingham City social media humming.

How likely is it that Bassini will buy Birmingham City?

Regular readers will know I’m normally pretty cautious about making predictions on things, simply because football can be wild sometimes and I’m very aware of just how little I know.

That being said, I’m willing to stick my neck on the line and say that I’m pretty sure that Bassini is not going to buy Birmingham City.

If it came down to it, right now I think I’ve got a better chance to buy the club, and despite the current parlous state of my overdraft I think it’s possible that I have more money than Bassini too.

I’m a believer in the philosophical concept that is Occam’s Razor, which in essence states the simplest explanation is most frequently the correct one.

In this case, I believe that Bassini, a man who is known for making claims he’s buying clubs he can’t afford before, has either been linked to Blues cos he’s seeking attention or relevancy; or he’s been linked to Blues by a journalist who needs some column inches filled and hasn’t got anything better to write.

Won’t this smoke out a proper bidder though?

I’ve seen some suggestions from fans that this story is good news because it will smoke out a proper bidder for the club, and somehow the club could get sold.

While I admire this kind of optimism, I think it’s incredibly misplaced.

I’m fortunate enough to have been in the situation in the past where I’ve spoken to multiple people who were interested in buying Birmingham City; people such as Jeremy Wray, Peter Day and Matt Southall.

This mostly happened back in 2014 when I was naïve enough to believe that these people spoke to me because I had something valuable to offer. I’ve got older and more cynical in the intervening years and I’ve come to realise that anyone who tries to push a takeover through publicly, or for that matter seeks the opinion of a hairy-arsed blogger form Kingshurst is just a tyre-kicker.

Take Derby County as an example.

Last season, Erik Alonso made a very public attempt to buy the club. By this point Mel Morris was desperate to sell, and so it was a deal that very much could have been done.

As we all know, it didn’t happen.

Now if you listen to Alonso, it was because those nasty people at the EFL didn’t want a 29-year-old Chairman of a Championship club, while all those nasty rumours about him faking having a huge house was because his Twitter account was hacked.

While all that could be true, using the same philosophical concept mentioned earlier, it’s more likely Alonso failed because he just didn’t have the dough.

This is a common theme for most would-be purchasers trying to buy something publicly, as often they are looking to drum up interest to buy into a consortium, and maybe at the same time destabilise things at the target club so the price comes down a bit.

Is there no one interested in buying Blues?

That all being said, it would be false to say no one is interested in buying Blues.

Again, based on my experience I would say that there is always at least one party interested in buying the club. Many are a bit more savvy than chancers like Alonso or Bassini and keep their interests out of the public domain – but they are absolutely there.

However, being interested in buying a club doesn’t mean that a takeover is imminent.

For a takeover to happen, the seller has to be somewhat willing to sell – and at Blues, that just does not seem to be the case.

As much as some of us would like to see the owners of the club sell up, what we want and what they want are two very different things. It might be there is a price where the owners would consider upping and walking away – but my feeling is that price is much too high for anyone who is serious about buying Blues.

As a publicly listed company, it is theoretically possible for a would-be owner to make an offer for shares in Birmingham Sports Holdings (BSH) and to take control of the club that way.

However, the rules are clear – if a bid is made for 30% of the shareholding then a general offer for all shares must be made. At the current share price, it would cost a potential purchaser just under £250M to buy every single share in Birmingham Sports Holdings; any share price rise and that would increase very quickly.

Even then, there are complications.

BSH only owns 75% of the club. To get total control of the club, a separate deal would have to be done with Oriental Rainbow Investments (ORI), who own a further 21.64%.

Not only that, but BSH don’t own St Andrew’s either.

To buy that, the would-be buyer would have to approach Achiever Global Group (owned by the mysterious Kang Ming-Ming) as well as the aforementioned ORI to complete the purchase there.

Suffice it to say, it would not be as easy as Bankrupt Baz rocking up to Kop Reception with an IOU for £27M to buy the club.

Do the owners even need to sell?

This is an incredibly difficult question to answer, as it not only requires knowing just who owns Birmingham City but understanding their intentions.

There are two reasons I believe that would bring about the sale of Birmingham City – either the owners suffering a lack of cash; or regulatory bodies forcing the sale.

As I can’t currently see either the HKSE or the EFL caring too much about the ownership of Birmingham City, that would mean that the main reason the owners would need to sell would be a lack of cash.

Unfortunately, that doesn’t seem likely.

On November 3, Trillion Trophy Asia owner Paul Suen Cho Hung added to his stake in a London Stock Exchange-listed company called Playtech PLC. The purchase of shares took his stake in the company to 3.2% or 9,791,979 shares, with the last tranche bought at a fairly beefy £7.00 per share. That purchase meant his holdings in the company were worth £68.543M.

At close of business on Friday, those shares were worth £7.2950.

That means those shares Paul Suen owns are now worth £71.432M – a profit of nearly £3m in under two weeks.

Suffice it to say, I don’t think Suen is short of a few bob right now.

It’s harder to track what the elusive Mr King has been up to, but I’m fairly sure he’s doing okay for cash right now too.

Since his common-law spouse bought a new pad in London for £6.4M cash in May, her business in London has been busy moving premises and introducing new products. While I’m not one to pay £185 for a computer mouse, the company appears to be doing well and they now have a wireless charger on Kickstarter which you can pick up for £105.

Along with other things I’m watching, this makes me think that right now the owners of Blues are not in a place where they need or want to sell.

Are we stuck with these owners forever?

The easy answer to this is no because forever is a very long time. While things might appear complicated right now, situations can, and do change. The issue is that the time it takes for the situation to change might not be the time that some fans want this to happen.

There are also questions over why these owners are wanted out.

I know some who think the owners have “asset-stripped” Blues but the truth is, they’ve put a lot of money in… it’s just been wasted.

The summer of 2017 was a case in point.

Blues spent heavily on bringing in players, taking the club far beyond the Profit and Sustainability limits and eventually ensuring that Blues got docked nine points the following season.

Blues spent a shade under £15M on seven permanent signings alone (Maxime Colin, Harlee Dean, Cheick Ndoye, Jota, Marc Roberts, David Stockdale and Isaac Vassell), adding £7M a year in basic wages to the payroll in the process.

Jota was the highest paid of those players, picking up a hefty £35k basic pay per week while Cheick Ndoye trousered £30k in basic pay per week and a £1.25M per year signing on bonus.

That season, according to the accounts filed at Companies House Blues brought in £18.778M in revenue. What that means for every £1 that the club bought in, it was spending 37.28p on just those seven players basic wages. That doesn’t include bonuses, agency fees or their transfer fees.

That money had to come from somewhere.

Money hasn’t just been wasted on players either. In 2019, former Blues CEO Xuandong Ren was happily running up monthly credit card bills of up to £15k per month for everything from Amazon purchases to handbags for his missus. This was on top of a chunky salary, a nice pad in Chelsea Harbour and a car.

Money hasn’t really been a problem in the past – and if the owners are now reining the spending in a bit, can anyone realistically blame them?

Likewise, if people are just hungry for new super-rich owners are they not just a part of the huge problem football has?

Conclusion

I get why people are desperate for change, but I think it’s important that we accept what has been bad in the last ten years and why.

Over at Derby County, Mel Morris has apparently spent £200M in trying to get Derby County promoted. Not only that, but he’s tried to do everything he can to skirt the rules and keep spending. All he has to show for it is a much emptier bank account, a club in administration and facing a total points deduction this season of 21 points which could easily send them down.

Blues don’t need another would-be sugar daddy to take them on and spend, spend, spend in the hope of glory.

Likewise, I’m not comfortable with the club being controlled by someone so shadowy they can’t put their own name to anything for fear of being investigated.

As much as we can hope for better things, we need to understand that we probably won’t hear about it until it is truly happening; and those that promise the earth rarely deliver anything more than ashes.